EURCAD Testing Channel Top
Price action in EURCAD is looking interesting here. The pair has been grinding steadily lower within a well-respected bear channel over the course of 2022 so far. However, we’ve seen strong bullish divergence creeping in at the recent lows. Price has since reversed higher off the 1.3439 level and is testing the channel top and structural resistance at the 1.3766 level, suggesting room for a breakout and fuller reversal. Bulls can look for longs through a break of 1.3766 targeting 1.39 initially and 1.4029 thereafter. Retail positioning is currently evenly split, suggesting plenty of room for this move to develop further.
Keep an Eye On
CAD is currently under pressure from the pull-back in oil prices. If the plunge deepens, we can expected CAD to continue lower near term, allowing EURCAD room to run higher. Additionally, EUR has received a boost from recent reports highlighting growing support for an ECB rate hike near-term. If this develops further as a market theme, monetary policy divergence ( or at least in terms of expectations) will erode between the ECB and BOC, helping lift EURCAD.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.